How do I find a financial adviser for a one-off review of my plans?
15 July 2021
Question by Susan
Hello, I have an old company Defined Contribution (DC) pension and a Free-Standing Additional Voluntary Contribution (FSAVC) pot of £430,000. I'm 55 next month and am thinking of moving into a drawdown SIPP (Interactive Investor or AJ Bell). I am thinking of taking my 25% and leaving the rest invested until I need a regular income in my mid 60s. I want to use the lump sum to top up my earnings, as I need use up to £20,000 to change my car and new kitchen. (I have no dependants and don't need a large income) I've looked at different funds and am thinking of splitting the pot into 5 or 6 (3 equity funds - maybe Fundsmith, Vanguard LifeStrategy and one other, along with a property fund and a bond fund. I am trying to find a financial adviser who is willing to spend a few hours to review my plans to make sure I'm not making any major mistakes, and that I won't run out of money (the tools I've found online all seem to come up with slightly different results), but so far they all seem to want an ongoing relationship. Where is the best place to find an adviser who will do a one off review? (I've tried the two main recommended websites for finding an advisor) Also I want to make sure my money is as safe as possible if any of the companies/fund managers get into financial difficulty. I know the Cash protection is £85,000, but I am unsure whether the investment protection is per fund or per SIPP. Thanks
Answered by Catherine Morgan
It sounds like you have done your homework which is great! What an exciting time for you.
I totally appreciate that this can be a bit of a minefield, right?!
The main focus for you will be around making sure that the income will last you for the rest of your life (which I know is a little bit like a finger in the air job!) but it is really important to ensure that your investment strategy takes this into account.
It seems that you have already tried to find an adviser to discuss these areas with you, and I am sorry to hear that you have not been successful with your search.
Financial Advisers vs Financial Planners
When seeking financial advice, if you are not looking for a simple product implementation, I would focus your search on a ‘financial planner’ rather than a traditional 'financial adviser'. Try searching for financial planners in your local area or ask for local recommendations.
Alternatively I would be very happy to connect you with a financial planner who can help you. A financial planner would be able to build out several scenarios for you, including things like annuity purchases, drawdown, tax free cash etc through the use of financial forecasting. As you have no dependants, you may wish to consider annuity purchases depending on your health and other personal circumstances.
The financial planner can also look at drawdown rates and ensure that you never run out of money. Many financial planners charge a one-off-fee (typically between £1,000-2,500) to produce your financial plan, and some would consider this without the ongoing relationship.
However I would say here that I am a huge believer that this is the one time in your life when you should seek financial advice, and consider an ongoing relationship to ensure that the pension pot continues to meet your needs.
I would highly recommend you read the book “Beyond the 4% rule: the science of retirement portfolios that last a lifetime” by Abraham Okusanya, to understand how to navigate the landscape of retirement.
From a protection perspective, if the company your DC pension is held with fails, you are protected up to 100% with no upper limit, so long as they are regulated under the FCA. You can find more information about this here.
All the very best.
Certified Financial Coach
Catherine has a passion for educating women around the behavioural and practical aspects of money. She is a Mum of two and founder of The Money Panel, a money guidance business for women, helping to support them in managing their personal and business finances. She's was nominated as a finalist in the Women in Financial services award 2018, and works as a regulated financial planner.